Sea lanes: Nicaragua’s plan for an inter-oceanic canal

A proposed new canal wll traverse Nicaragua from the Pacific to the Caribbean Sea and thus the Gulf of Mexico, Venezuela and South America, and the Atlantic Ocean. The project has caused consternation in both Washington and Ottawa.

Nicarague Canal.map

One of the decisive spheres in the contest for world hegemony is control over maritime trade routes. Currently these are under control of NATO countries which, at any time, could use the their naval fleets to put pressure on sovereign countries they wish to bring under western dictate or destabilize. For them, the sea is but a road for transporting troops, the robbery and plunder of resources and capital accumulation. To this end, they peddle various spurious theories such as “freedom of the seas,” “global responsibilities,” “vital interests,” and the “war against terrorism,” “war against drugs” and “war against piracy” to justify a global navy and the exercise of extra-territerritorial rights by the dominant powers.

Canada borders three oceans. The Harper Government is deeply involved on behalf of the North American monopolies in this world struggle. Along with expanding the navy and coast guard by 100 ships, it is seeking new arrangements through different competing projects – the Atlantic Gateway utilizing ports in the Maritimes linked to the Suez Canal and South Asia on the one hand and New England and the Great Lakes on the other; the Asia-Pacific Gateway through West Coast ports and Corridor Initiative; the opening of the North West Passage; and the expansion of the St. Lawrence Seaway – in this geopolitical direction. (See maps of the Gateways here.)  The project is a concern to these contending schemes aiming to capture trans-oceanic trade from Asia to the USA.

At the same time, the Canadian Forces are quietly involved in the annual Panamax naval-military exercises mounted by US Southern Command to re-militarize the Panama Canal. The 2013 exercise from August 5–17 involves the navies of 17 countries. In April 2012, Harper announced a new $25-million Canadian Initiative for Security in Central America, which further confirmed Canada’s intervention in the region with respect to “security cooperation.” On July 29, Foreign Affairs Minister John Baird visited Nicaragua, the first visit by a Canadian foreign affairs minister since Lloyd Axworthy visited in 1999. (Nor did he apologize for Canada’s role in the criminal U.S. mining of Nicaragua’s harbours in 1984!) In parallel, the US and Canada are, under the pretext of “the protection of sovereignty,” expanding their military activities in the Northwest Passage and the Arctic.

Obama’s Asia Pivot military strategy lurks in the background; one of its central aggressive aims is ultimately the forcible denial of China to sealanes and trade routes

In this report, Cuban journalist MARIA JULIA MAYORAL provides information on the serious initiative by Nicaragua in partnership with Chinese capital to develop an independent alternative to the U.S. controlled Panama Canal, in the context of the rising volume of trade along the sea lanes and trade routes. The canal wll traverse Nicaragua from the Pacific to the Caribbean Sea and thus the Gulf of Mexico, Venezuela and South America, and the Atlantic Ocean that has caused consternation in both Washington and Ottawa. – TS

Nicaraguan President, Daniel Ortega  and Wang Jing from HKND Group,  after signing the canal framework  agreement. The development has  caused consternation in the Pentagon,  as it challenges U.S. dominance in  the region.

Nicaraguan President, Daniel Ortega
and Wang Jing from HKND Group,
after signing the canal framework
agreement. The development has
caused consternation in the Pentagon,
as it challenges U.S. dominance in
the region.

Granma (Aug. 1) – NICARAGUA could, within a few years, become a new international logistics and transportation centre, if an inter-oceanic canal megaproject succeeds in this country blessed with an enviable geographic location.

“Central America sits midway along both North-South and East-West trade routes,” said Chinese executive Wang Jing during a visit to Managua, “We believe this is the ideal place for another link between the Atlantic and Pacific Oceans.” The company he leads has been granted a concession to undertake the canal project.

Five of the six proposed routes for the new canal pass through the giant Lake Nicaragua.

Five of the six proposed routes for the new canal pass through the giant Lake Nicaragua.

According to international estimates, between 2011 and 2025, maritime trade traffic will increase some 40 per cent and providing a route through Nicaragua for large cargo ships would provide significant savings in terms of fuel and days at sea.

The Hong Kong Nicaragua Canal Development Investment Group (HKND), with headquarters in the Chinese city cited and Managua, is optimistic about the venture, according to Wang Jing, president and executive director of the company.

HKND Group received exclusive rights over planning, design, construction, operation and management of the canal and other related projects, including ports, railroads, free-trade zones on both coastlines, airports and a cross-isthmus oil pipeline.

“Trends in world trade and maritime transportation indicate that there is demand for a new canal. Our intention is to build a world class project, developed in accordance with the best international practices,” the company announced.

The framework for the concession was signed in Managua mid-June by Nicaraguan President Daniel Ortega and the company’s directorate, while the country’s Parliament approved two pieces of legislation supporting the agreement.

Experts and established companies have been contracted to undertake studies of the project’s environmental, social, financial and technological feasibility. The British consulting firm Environmental Resources Management will independently evaluate the project’s social and environmental impact, in order to determine the most appropriate route for such a canal, which could require five to ten years to construct.

Building a second Central American canal, substantially larger that the existing one, makes sense to HKND. Estimates indicate that the volume of Panama Canal transactions could increase 240 per cent by 2030, while the value of all goods transported through canals in Panama and Nicaragua could surpass 1.4 billion dollars.

According to this analysis, continual growth in trade volume could lead to congestion in Panama within 10 to 15 years, clearly suggesting that another route is needed.

As for possible savings, HKND has estimated that a ship traveling from Shanghai to Baltimore in the United States, using a Nicaraguan canal, could shorten its voyage by 4,000 kilometers in comparison to a common route currently taken through the Suez Canal and by 7,500 in comparison to a voyage around South Africa’s Cape of Good Hope. Considering current fuel prices, an average-sized container ship could save a million dollars on one round trip using a new canal.

Preliminary estimates indicate that a new inter-oceanic canal could capture maritime traffic carrying 450 to 500 million metric tons of goods and serve ships up to 250,000 tons, 400 meters long and 59 wide, with draughts of up to 22 meters.

Paul Oquist, the Ortega administration’s secretary for public policy believes that the canal will allow Nicaragua to practically double its gross domestic product (GDP) by 2018 and triple formal employment. With the beginning of necessary studies and works associated with the canal next year, Oquist estimates the GDP could increase by 10.8 per cent and by 12.6 per cent in 2016, to subsequently stabilize around 9.5 to 10 per cent annual growth by 2018.

NATIONAL SOVEREIGNTY DEFENDED

Nicaragua granted a concession for construction and future operation of the canal, but did not privatize its territory. Additionally, the state is participating as a partner and its ownership share will expand over time, Oquist clarified.

The concession granted the Chinese company is for 100 years but should not compromise national sovereignty, since the country will hold 51 per cent ownership within 50 years, according to Deputy Foreign Minister Manuel Colonel Kautz, who is heading Nicaragua’s Gran Canal Authority.

Nicaragua.p12cA canal connecting the Pacific and Atlantic oceans through Nicaragua has been a long-standing dream, one which was frustrated by foreign interests in the early 1900’s, added Francisco Mayorga, the country’s representative to the Inter-American Development Bank.

The 1914 Chamarro-Bryan Treaty mortgaged national territory to the United States government, effectively preventing the development of a canal similar to Panama’s within Nicaragua, the official explained.

The United States had used its military and economic power to force Nicaragua to forego constructing a canal without U.S. participation, to protect its interests in the Panamanian isthmus, Mayorga concluded. (Orbe)

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2 responses to “Sea lanes: Nicaragua’s plan for an inter-oceanic canal

  1. Pingback: Implications of Asia Pivot military strategy for Atlantic Canada | Tony Seed's Weblog

  2. Pingback: Sealanes: Nicaragua approves new Atlantic-Pacific canal | Tony Seed's Weblog

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